Thursday, January 12, 2012
Key benchmark indices edged lower in choppy trade, with IT stocks leading the decline after IT bellwether Infosys issued a muted outlook for Q4 March 2012 at the time of reporting Q3 December 2011 results before trading hours today, 12 January 2012. Nonetheless, the market staged intraday recovery with the barometer index, BSE Sensex, regaining the psychological 16,000 level after falling below that level in intraday trade. Gains in European stocks, stronger-than-expected growth in industrial production in November 2011 and food inflation remaining in negative terrain for the second week in a row, aided intraday recovery on the domestic bourses. The Sensex lost 138.35 points or 0.86%, up about 75 points from the day's low and off close to 140 points from the day's high. IT bellwether Infosys tumbled more than 8%.
It was Infosys’ day as continuous weakness was seen in the technology shares after the IT bellwether announced weak guidance. The Sensex fell 138 points and the Nifty down 30 points
Headlines for the day
IIP turns positive in November
Food inflation at -2.9 vs -3.36%
Infosys cuts FY12 dollar revenue guidance; stock tumbles
HDFC Q3 net profit up by 10%
TTK Prestige plunges after Q3 results
Infosys was a major culprit today and disappointed the Street as the company reduced its revenue guidance in dollar terms for FY12. Relentless profit booking was seen in the technology shares after Infosys Q3 results, which led the Indian markets to close in the negative zone.
Though industrial output improved significantly in November, it proved to be an non-event for the market.
Sensex Movement: The Sensex opened the trade 59 points lower at 16117 led by losses in Infosys. In the mid-morning session after the release of IIP data, the Sensex recovered and hit an intraday high at 16179. However, weakness in the technology pack pushed the index lower to hit an intraday low of 15963 in the late morning trade. The Sensex closed 138 points lower at 16038 and the Nifty stood at 4831, down by 30 points.
The market breadth was in favour of advances. Of the 2875 stocks traded on the BSE, 1422 (49.46%) rose, 1310 (45.57%) fell and 143 (4.97%) were unchanged.
Integrated infrastructure development company — Lanco Infratech was traded the most, with over 0.69 crore shares changing hands on the BSE. Following that, Wind turbine major - Suzlon Energy (0.53 crore shares), India's second largest developer - Unitech (0.45 crore shares), industrial finance company – IFCI (0.43 crore shares) and India's largest real estate company - HDIL (0.41 crore shares).
Sectoral & stock screening
Among the 13 sectoral indices, four closed lower. Top Gainers - BSE Power up by 1.32%, while BSE Metal and BSE Bankex up by 1.08% each and BSE Auto up by 0.84%. Losers – BSE IT down by 5.96%, BSE TECk down by 4.41% and BSE Oil & Gas down by 0.81%.
Among 'A' group stocks, top three gainers - United Breweries surged by 12.86%, Shree Renuka Sugars advanced by 7.48% and Manappuram Finance up by 7.32%. Top three losers - Infosys dropped by 8.40%, TTK Prestige declined by 7.58% and Coromandel International slipped by 4.54%.
The European shares were flat on Thursday (January 12, 2012), pausing ahead of a Spanish debt auction that is the first test in the new year of demand for peripheral euro zone debt, the latest stage of a crisis that remains a key drag for equity market sentiment.
The Asian stock markets closed lower on Thursday, amid inflation data in China that failed to meet expectations and fears of a possible recession in Europe. Market participants fretted over key debt auctions in Europe and a European Central Bank meeting this week.
The US stock index futures pointed to a flat to slightly lower open on the Wall Street on Thursday.
Data releases in the US on Thursday — Jobless Claims, Retail Sales, Business Inventories and Treasury Budget.
State Bank of India has cut the processing fee by half on loans when competitors were contemplating to raise it to offset losses on waiver of pre-payment penalty. (ET)
Reliance Communications, which has a US$925mn convertible bond maturing in March, is in talks with China Development Bank for a loan to redeem the bond. (BS)
Coal India’s new pricing system faces strong opposition from consumers across the country as it has pushed fuel costs up by up to 70% for the small and medium steel and cement industries. (ET)
Parliaments Public Accounts Committee is likely to meet on Thursday on the CAG report on production sharing of contracts with private oil companies, including the one with Reliance Industries Ltd for KG-D6. (BS)
Don't tell me how hard you work. Tell me how much you get done. - James Ling.
Markets took a breather after Tuesday’s stellar rally as investors appeared reluctant to commit ahead of the IIP data and Infosys results. The IT major is likely to deliver strong Q3 numbers, partly helped by the Rupee’s steep fall. Investors and analysts will tune into commentary from Infosys honchos for better understanding of the outlook for the coming few quarters. Watch out for Infosys’ revised FY12 guidance.
The start is likely to be quiet at best due to indecisive global cues. While the morning may belong to Infosys, the afternoon will see the markets react to IIP for November. It is expected to rebound from a disastrous October reading. One has to see if there is any upward revision of the October print of -5.1%. Weekly food inflation is also due today. It is likely to stay in the negative zone, mostly owing to the statistical phenomenon called ‘base effect’. more important will be the inflation report for December, which is due on Monday.
IT bellwether Infosys's Q3 results due today, 12 January 2012 will set the tone for the market. IT major is likely to deliver strong Q3 numbers, partly helped by the Rupee's steep fall. Finance major HDFC will also announce Q3 results today. Data on industrial production for November 2011 will also be closely watched. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated a flat opening. Mostly higher Asian stocks may support domestic markets.
The government will today, 12 January 2012, unveil data on some wholesale price indices viz. the food price index, the primary articles index and the fuel price index for the year through 31 December 2011.